Travelocity.Com Inc., the No. 1 Internet travel service, sold its entire 9.4 percent stake in Hotel Reservations Network Inc., the largest online broker of discounted hotel rooms and a Travelocity.com business partner.
Fort Worth, Texas-based Travelocity.com disclosed holding zero Class A common shares of Hotel Reservations today in a Securities and Exchange Commission filing, which didn`t report transaction details. Hotel Reservation`s latest proxy filing listed Travelocity.com as holding 1.7 million Class A common shares, including warrants to buy 1.3 million shares, for a stake of 9.4 percent as of Jan. 31.
The stake sale - which was confirmed by a Travelocity.com spokesman - is being reported two months after the two online travel companies expanded and extended through July 2005 an affiliation agreement that dates to January 2000.
``This was purely an economic decision,`` Travelocity.com spokeswoman Jennifer Tweeton said of the stock sale. The companies ``still (have) a very strong relationship.``
A Hotel Reservations spokesman echoed the statement. The two companies` ``links are still active on their respective sites,`` said Jeff Wilhoit, spokesman for Dallas-based Hotel Reservations.
Travelocity.com exercised the warrants and sold all the shares because it had to recognize its gains on the Hotel Reservations investment as deferred revenue even if it retained the stock. ``So, (the company) decided to go ahead and monetize those holdings,`` Tweeton said.
Hotel Reservations shares, which went public in February 2000 at $16 a share, rose $2.08 to $39.75 today.
Travelocity.com shares rose $1.40 to $36.